Creative Commons

September 05, 2008

As an ardent reader of Sneaky Business we're sure you'll need no reminder of the time value of money. It is the concept that a dollar today isn't worth a dollar tomorrow. (Or, in the hyperinflationary case of Zimbabwe, a dollar today isn't worth diddly squat tomorrow).

News from the retail world got us thinking about the potential impact of such a concept on brand names. The LA Times reported today that the 99 Cents Store, a US retail chain that prides itself on bargain basement items, is being forced to re-evaluate its pricing strategy. Faced with rising inflation and soaring food prices it is considering selling items above the one dollar bar for the first time since it opened. According to the Bureau of Labor Statistics, 99c in 1982 (when the store began) has the same buying power as $2.26 in 2008.

This got us thinking about which other famous brands might be in need of a facelift to better represent their value today. Here's our top six.

September 02, 2008

US TV viewers are exposed to an exhaustingly high quantity of TV commercials – that much we already know. But now new research has revealed that one of the more achingly painful class of adverts – that of prescription drugs – is really doing very little for the drug companies themselves.

Unlike in most countries, the US allows direct to consumer advertising for prescription drugs. (It is also allowed in New Zealand – though this, presumably, is a drop in the ocean compared to the disease laden US market). Drug companies in the US have experimented with imaginative ways of marketing solutions to such uncomfortable conditions as acid reflux, irritable bowel and catastrophic bloating. They have introduced an array of acronyms to gloss over unmentionables such as erectile dysfunction (ED) and to raise concerns over previously unknown conditions such as restless leg syndrome (RLS). And they have appended their messages with public safety warnings that run about the length of the Gettysburg Address.

But now we find out that the $3B they spent on TV ads during 2005 essentially came to naught. A team of researchers from Harvard and the University of Alberta reported today that direct to consumer advertising does little to encourage sales. Their study, reported in the British Medical Journal, concluded that too many things can go wrong in the chain of events between a consumer seeing the ad on TV and beating down their doctor's door to get hold of the drug.

What Sneaky Business finds most intriguing is the assumption that if direct to consumer advertising isn't effective then drug companies wouldn't be doing it. Turns out that "….decisions to market direct to consumers are based on scant data".

We assume that drug company executives are turning to their heartburn relief tablets in added quantities today with the release of this report.